More often than not newcomers are unaware of their responsibilities as taxpayers or in the dark on how to file a tax return for in a lot of countries filing taxes is not an obligation. We have prepared the Newcomers’ Quick Guide to Taxes to serve as a starting point, we truly hope you will find it helpful.
First things first: Who must file a tax return?
Those who have established significant residential ties are considered residents for tax purposes, this group includes:
- Canadian citizens and permanent residents
- Refugees (protected persons)
- People who have received approval-in-principle from Citizenship and Immigration Canada, to stay in Canada
- Temporary residents, such as foreign students and foreign workers
Secondary residential ties
- A home in Canada
- A spouse or common-law partner and dependants who move to Canada to live with you
- Personal property in Canada
- Social ties in Canada, like memberships to recreational or religious organizations
- A Canadian driver’s licence
- Canadian bank accounts or credit cards
- Health insurance with a Canadian province or territory
NOTE: Canadian residency for tax purposes is not the same as residency for immigration purposes.
What kind of identification do I need?
You will need a nine-digit identification number, the social insurance number (SIN). It is used to identify a person for income tax and benefit purposes and to have access to government programs.
You can apply for one for free at any Service Canada office providing a primary document that proves your identity and status in Canada.
Temporary workers SINs’ start with a 9 and are temporary and valid only until the expiration date printed on the front of the card.
If you do not qualify for a SIN you can apply for an individual tax number or ITN at the CRA to file taxes.
What do I need to do?
Complete an income tax return where you will list your income (from both inside and outside Canada) and deductions, then you have to calculate federal and provincial or territorial tax to determine if you have a negative balance, tax owing, or a positive one and are entitled to a refund.
If you live in Quebec, you must file two separate returns, the federal return, which you must send to the CRA and the provincial return that goes to Revenu Québec.
How do I calculate my income and taxes?
Employees: Your employer or payer will issue an information slip with the total of all your earnings and deductions. The slip must include your name, address, and SIN.
Self-employed: You are responsible of keeping track of the income and expenses of your business; since no taxes are withheld from self-employment income, you may need to pay your taxes in installments.
What if I already paid tax on income from another country?
Canada has tax treaties with various countries designed to avoid double taxation.
Which form do I use?
Newcomers must use the general income tax and benefit package and the forms booklet for the province or territory where they resided on December 31st of the tax year. Use the Pamphlet T4055, Newcomers to Canada, as a reference to complete your first income tax and benefit return.
When do I need file my return?
It must be filed on or before April 30th following the end of the tax year which is December 31st.
If you or your spouse, or common-law partner is self-employed, your return must be filed on or before June 15th; yet any balance due must be received by April 30th.
Where do I do I send my return?
What happens after I send my return?
It will be processed and you will receive a notice of assessment with your final result. If you are entitled to receive certain benefits for applied to the GST/HST credit, the CCTB, the UCCB or some of the provincial and territorial benefits, you will get a notification with the amount you can expect. Keep the notices for your records.
How long should I keep my records?
Keep a copy of your income tax and benefit return and all the supporting documents for a minimum of six years after the end of the tax year to which they relate.
What if I disagree with my notice of assessment?
Contact the CRA to determine what changes were made to your return, and why. Keep a written record of your correspondence with the CRA, include the names of the officers that you speak to and what is discussed. It is possible that you are required to provide additional information. If after you still don’t agree with the assessment, you can file a formal objection.
The Newcomers’ Quick Guide to Taxes is based on the Canada Revenue Agency Series: Newcomers to Canada and the Canadian Tax System where you can find more information.